programs Insurtech

Workers’ compensation insurance has been around for more than a century in the United States as a way to safeguard both employees and their employers in the event of accident or injury. For most of this period, it remained largely unchanged. In recent years, though, technology and innovation are transforming the way it protects workers and the companies that employ them.

“There’s definitely a lot to be excited about when you consider emerging technology solutions,” says Dale Hoppe, Vice President of Workers’ Compensation Programs at Nationwide.

A segment  in flux

New solutions couldn’t have come at a better time as the workers’ compensation market faces challenges related to stubborn inflation, such as increased wages, medical costs and indemnity severity. At the same time, competition has increased.

“New players have emerged, and a lot of carriers in this space are going after the same market share,” notes Hoppe.

Increased competition has brought down rates, too, as insurers compete for the same business.

Workers’ comp, reimagined by technology

Innovation is happening at a rapid clip thanks to emerging insurance technologies, known as insurtech, that are enhancing the way insurers select risk, underwrite policies, manage the claims process, support insureds and more.

Insurtech is transforming the workers’ compensation segment through the use of big data analytics, artificial intelligence, machine learning, wearable technology and more, adding value for both insurers and insureds by increasing efficiency and pricing accuracy and enhancing safety.

“Technology now offers us a way to help analyze risk characteristics and make informed decisions about risks more quickly,” Hoppe explains.

Ultimately, with more competitors in the workers’ comp space than ever before, insurers are leaning into insurtech to gain an advantage over the competition.

“There have been multiple waves of insurtech,” explains Jacob Geyer, Chief Insurance Officer at CompScience. “The first wave was centered around disruption with a lot of focus on streamlined quoting solutions. The next wave is about how to create true product differentiation.”

Adding value with AI-enabled solutions

Beyond using technology to streamline quoting, optimize underwriting and manage claims, insurers are using AI-based tools like CompScience to help their insureds boost safety and reduce their workforce risks, and these value-added extras are helping set them apart in the workers’ comp market.

Nationwide recently announced an MGA partnership with CompScience, an AI-powered accident prevention company that leverages video analytics technology to identify and mitigate workforce injury. CompScience software uses more than 50 AI models to analyze hours of video footage from insureds’ existing cameras, find risky behavior and identify trends.

“We utilize computer vision and AI to deliver actionable insights to our clients,” says Geyer. “The beauty of it is we are using video assets they already have and giving them a real return.”

Geyer’s team at CompScience creates an executive risk report that details what they learned from the video footage and outlines their recommendations. For example, when the team ran an analysis for a manufacturing client, they identified a risky behavior—climbing over a conveyer belt—and were able to determine that it happened more than 600 times.

They recommended that the client install a liftgate for employees to use instead of hopping over the line, and that stopped the unsafe behavior immediately.

“This is a case where we showed them how to engineer the risk out entirely,” Geyer notes.

With this single effort, they were able to increase the safety of the employees while reducing the costs of both insurance and claims for the employer, creating a win-win scenario.

A wide-open future

Insurtech has the potential to transform the workers’ compensation sector by leveraging technology to create safer work environments, help insurers optimize their risk portfolios, streamline the underwriting and claims process and more. Solutions like CompScience are already making strides and driving positive change in the industry.

“We have a huge goal: to prevent millions of accidents from happening in the future,” says Geyer of CompScience’s mission. “This is just the beginning.”

Looking ahead, one thing is certain: Insurtech is poised to play a pivotal role in the future of workers’ comp.

“In the current landscape of declining rates and more competition, innovation is more important than ever as insurers work to differentiate themselves from their peers,” Geyer concludes.